CH 220059-RT
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEALS OF DOCKET NO. CH 220059-RT &
CI 210264-RO (refile of
CH 210051-RO)
James Mann (tenant), and : DISTRICT RENT OFFICE
Asher Hiesiger (owner), DOCKET NO. K 3104233-RT/
CDR 33696
PETITIONERS :
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ORDER AND OPINION REVOKING COMMISSIONER'S PRIOR ORDER AND OPINION
AND GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW IN PART AFTER
REOPENING AND RECONSIDERATION
The above-named petitioners,tenant and owner, filed and refiled
timely Petitions for Administrative Review of an order issued on
July 12, 1988 by a District Administrator concerning the housing
accommodations known as 862 Union Street, Apartment 4F,
Brooklyn, New York. The petitions have been consolidated.
The tenant, who took occupancy on July 1, 1980 pursuant to a one
year lease at a rent of $400.00, filed a complaint of overcharge
and a fair market rent appeal on March 31, 1984. A complete
rental history was submitted in the course of the proceeding.
The herein appealed order of the Rent Administrator, after
finding that a fair market rent appeal was not warranted,
established the tenant's initial regulated rent at $303.95 as of
July 1, 1980, updated it to $405.92 as of July 1, 1986, and
directed a refund of $11,740.02 in overcharges including interest
on overcharges after April 1, 1984.
The order was based on the above-noted rental history and, in
substance, reflected findings that the lease rents of the
complainant tenant, and the prior tenant, were in excess of
guideline adjustments over earlier rents.
In his petition, the owner alleges that the rents charged by the
prior owner to two earlier tenants were considerably lower than
those allowable under the guidelines and urges that, as a new
owner, he should be permitted to recalculate those rents and
charge subsequent tenants accordingly. He further urges that he
is somehow "being held responsible for overcharges caused by the
previous owner" in violation of Section 2526.1(f) of the current
Code.
In his petition, the tenant urges:
"Damages should be trebled. Owner failed to show lack
CH 220059-RT
of willfulness . . . in overcharges made against Jacob
Toby [the immediately prior tenant] (effective dates,
11/11/78 and 12/1/79."
On October 1, 1990 the Commissioner issued an order and opinion
denying the owner's petition and granting the tenant's petition
by further imposing treble damages and modifying the
Administrator's order accordingly.
With respect to the owner's petition the Commissioner, in
substance, noted that guideline adjustments are to be computed on
rents actually charged not rents which might have been charged
and rejected the owner's attempt to blame the overcharges on the
prior owner.
With respect to the tenant's petition, the Commissioner found
that, the owner did not, in fact, demonstrate that the
overcharges were not willful noting that, even were the owner
given the benefit of his arguments respecting recalculating prior
rents, there would still have been overcharges as to this tenant.
Further, the owner did not promptly reduce the rent or make
refunds upon receipt of the tenant's complaint.
Subsequently on October 31, 1990, another order was issued
reopening the proceeding because it appeared that a letter of
July 31, 1990 supplementing the owner's petition had not reached
the record, and because the tenant's petition had been served
only on the owner's former managing agent. A copy of the
tenant's petition was thereafter specifically served on the owner
in care of his attorneys.
Both parties were afforded opportunities to respond and submit
additional arguments which they did.
In the above-noted supplement to his petition the owner urged
that the case of J.R.D. Management Corp. v. Eimicke, 148 App.
Div. 2d 610, 539 N.Y.S. 2d 667 (2nd Dept. 1989) prohibits this
agency from considering any part of the rental history prior to
April 1, 1980 and that, when consideration is so limited, it
will be found that the overcharges are considerably less.
In response to the tenant's petition the owner urges that the
tenant is complaining only about the overcharges to the prior
tenant and, since those overcharges occurred more than 2 years
prior to the filing of the tenant's complaint, this agency is
prohibited from imposing treble damages based on them.
In response to the owner's submissions the tenant urges, in
substance, that, even if the J.R.D. Management Case is
applicable, there are still substantial overcharges.
The Commissioner, upon reconsideration after reopening, is of the
opinion that the prior order and opinion of October 1, 1990
should be revoked and both petitions granted in part. The
Commissioner notes that the tenant's petition is, in fact, being
granted in part even though the total amount of overcharges is
being reduced as discussed more fully infra.
With respect to the owner's petition, the Commissioner is of the
opinion that the rationale of the above-noted prior
CH 220059-RT
determinations as to the owner's contentions regarding rents
charged by the prior owner to prior tenants remains valid even
though the prior order, as a whole, is being revoked.
However, the Commissioner feels constrained to hold that,
pursuant to the J.R.D. Management Case, the April 1, 1980 rent to
$325.00 charged a prior tenant should be taken as the base rent
for purposes of computing the initial and subsequent legal
regulated rents of the complainant tenant and resulting
overcharges.
With respect to the tenant's petition, the Commissioner is of the
opinion that it can reasonably be interpreted as referring to
overcharges relating to himself as well as the prior tenant and
that the rationale of the prior determination imposing treble
damages also remains valid although the amount thereof is herein
reduced and the prior order, as a whole, is being revoked.
Rents and overcharges have been recalculated on the chart
attached and made part hereof.
Because this order concerns lawful rents only through June 30,
1988, the owner is again cautioned to adjust subsequent rents to
amounts no greater than that determined by this order plus any
lawful increases, and to register any adjusted rents with this
order and opinion being given as the explanation for the
adjustment.
This order may, upon the expiration of the period in which the
owner may institute a proceeding pursuant to Article 78 of the
Civil Practice Law and Rules, be filed and enforced as a
judgment.
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that the Commissioner's prior order and opinion of
October 1, 1990 be, and the same hereby is, revoked; that these
petitions be, and the same hereby are, granted in part; and that
the order of the Rent Administrator be, and the same hereby is,
modified in accordance with this order and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
CH 220059-RT
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